40 Years Ago
MIT Technology Review (ISSN 1099-274X), March/April 2017 Issue, Reg. U.S. Patent Office, is published bimonthly by MI T Technology Review, 1 Main St. Suite 13, Cambridge, MA 02142-1517. Entire contents ©2017. The editors seek
diverse views, and authors’ opinions do not represent the official policies of their institutions or those of MI T. Periodicals postage paid at Boston, MA, and additional mailing offices. Postmaster: send address changes to MI T Technology Review, Subscriber Services, PO Box 5001, Big Sandy, TX 75755, or via the Internet at www.technologyreview.com/customerservice. Basic subscription rates: $41.94 per year within the United States; in all other countries, US$54.
Publication Mail Agreement Number 40621028. Send undeliverable Canadian copies to PO Box 1051 Fort Erie, ON L2A 6C7. Printed in U.S.A. Audited by the Alliance for Audited Media
Electronic Money Is Too Easy
In 1977, a writer worried that people might lose control if cash went away and
transactions went digital.
“The era of Electronic Funds Transfer (EFT) is undoubtedly on its way. Auto-
mated clearing houses have been set up to transfer payments from bank to
bank via computer; pay-by-phone services are springing up; and electronic
terminals are appearing in banks and stores to check credit and dispense cash.
The possibility that electronic cash might zip through the consumer’s fingers faster than hard money worries Gordon B. Thompson of Bell Northern
Research. Mr. Thompson wondered whether the combined impact of responsive cable TV and electronic money might tempt the shopper into impulsive
video-shopping. ‘ The hard sell one sees on television could be directly coupled
to a purchasing act,’ said Mr. Thompson. ‘By just inserting a credit card in the
appropriate slot and pressing a button, the latest kitchen gizmo is on its way to
the viewer’s home, and his bank account will have been automatically adjusted.’
Electronic gambling could also be possible with the combined responsive
cable TV/EF T systems, said Mr. Thompson. There could be ten-second lotteries, with painless payments made by simply slipping a credit card into the slot.
[These systems could] bilk every compulsive gambler in the entire country.
EFT could make it possible to issue paychecks on a daily basis, and to pay
bills on a daily basis ... It could be possible to control payments precisely for
maximum benefits, for example, paying one’s taxes precisely at 11: 59 on April
15 of each year. Unfortunately, according to Robert H. Long and Wayne B.
Lewin of the Bank Administration Institute, the government would probably already have gone to daily payment of taxes by then.
Other effects are not so obvious, said the two researchers. Because computers are more impersonal than human-centered systems, there might be
an increase in ‘beat the system’ types of crimes. The challenge of the game of
ripping off the computer may be just too much. ‘ The person who today tries to
beat the house in Las Vegas ... might find the challenge of beating the electronic
value transfer system too good to pass up. After all, who is hurt?’ they asked.
Finally, and perhaps most ominously, the concentration of data in EFT systems will tempt greater government control of the economy, for huge amounts
of economic data will be readily available, tempting policymakers to act upon
it. And the power of EF T records may also tempt government to gather information on the habits and finances of the public, perhaps endangering privacy.”
Excerpted from “Doubts About Electronic Money,” from the February 1977 issue of